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The Role of Fiscal Policy in Economic Growth: A Comparative Analysis of Developed and Developing Countries

Author

Listed:
  • Md. Shahinul Islam

    (Department of Economics, Pabna University of Science and Technology, Pabna, Bangladesh)

  • Md. Al Amin

    (Department of Economics, Pabna University of Science and Technology, Pabna, Bangladesh)

  • Md. Billal Hossain

    (Department of Economics, Pabna University of Science and Technology, Pabna, Bangladesh)

  • SM Al Imran

    (Department: Swaruupkathi Sub Branch, Islami Bank Bangladesh, PLC, Bangladesh)

  • Nusrat Jahan

    (Department of Mathematics and Economics, Playpen School, Bangladeash)

  • Fahad Bin Asad

    (Department of Economics, Pabna University of Science and Technology, Pabna, Bangladesh)

  • Abdullah Al Mamun

    (Senior Officer & Branch Operation Manager, Pubali Bank PLC, Bangladesh)

Abstract

This objective is to provide a comparative research study that explores the role that fiscal policy plays in economic growth, with a special focus on both industrialized nations and developing countries. The study will explore the effect that fiscal policy has on economic development. Another area that is examined in this study is the connection that exists between fiscal policy and economic development. Another way of putting it is that it is a convoluted link that, depending on the economic climate in which it is being evaluated, might take on a somewhat different aspect. Given the nature of the relationship that exists between fiscal policies and expanding economies, it may be difficult to comprehend the link. The role that fiscal policy plays in the process of economic growth is influenced by a variety of factors, each of which has its own unique effect. Factors such as the organization of the government and the economy, as well as the specific channels through which fiscal policies are implemented, are included in this category. There is a significant gap between the industrialized nations and the developing countries in terms of the significance that fiscal policy plays in the process of economic growth. This gap is particularly pronounced in the development countries. In order to accomplish the aim of shining light on these discrepancies, which will be accomplished via the evaluation of empirical data and theoretical frameworks, the purpose of this comparative research is to achieve the purpose of illuminating light. Over a variety of different routes, fiscal policy has the potential to impact economic development. When it comes to industrialized nations, fiscal management that is solid often results in lower interest rates, which in turn supports private investment and consumer activity. In contrast, successful fiscal policies may boost human capital development in poor countries by directing public expenditure on education and infrastructure in a targeted manner, which can result in long-term economic gains.

Suggested Citation

  • Md. Shahinul Islam & Md. Al Amin & Md. Billal Hossain & SM Al Imran & Nusrat Jahan & Fahad Bin Asad & Abdullah Al Mamun, 2024. "The Role of Fiscal Policy in Economic Growth: A Comparative Analysis of Developed and Developing Countries," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 8(12), pages 1361-1371, December.
    • Handle: RePEc:bcp:journl:v:8:y:2024:i:12:p:1361-1371
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    References listed on IDEAS

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    1. Olivier J. Blanchard & Daniel Leigh, 2013. "Growth Forecast Errors and Fiscal Multipliers," American Economic Review, American Economic Association, vol. 103(3), pages 117-120, May.
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    5. Easterly, William & Rebelo, Sergio, 1993. "Fiscal policy and economic growth: An empirical investigation," Journal of Monetary Economics, Elsevier, vol. 32(3), pages 417-458, December.
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